Digital economy has radically changed how companies drive business. Transformation should not be embraced only as a contingency response, but as a continuous approach.

The opinions expressed in this post are my own.

It is frequent to find that Transformation programs roll-out as sporadic initiatives. A dedicated effort that companies run from time to time, sometimes as a late response that only comes when business results are not the expected. A silver-bullet program that aims to realign the company and recover shareholder value.

The fact is that these times, disruption is no longer a threat but a vivid reality across all industries, which consequently calls for an improved response to address competition.

To keep up the pace with competition, companies can no longer afford to keep holding to this reactive approach. A more current and genuine response is to empower the organization to embrace transformation as a continuous ongoing effort.

In the coming sections you will find a series of arguments as of why, in my opinion, it is important that companies adopt, or move towards establishing this continuous Transformation setup immediately. Lastly, I provide a general orientation of what constitutes good responses for any company that aims to stay relevant in Digital economy.

Change is natural

Let us take a step back. Actually, back to the basics.

One of the things that we learn quite quickly in business is that the only constant is change and uncertainty. Organizations are untiringly pursuing to move away from their current unwanted state X to a renewed state Y (sometimes a faster version of X which only accelerates inefficiencies; a.k.a. change); or less frequently aiming to move to a completely new and promising state Z (a.k.a. transformation). Constant adjustment is the most natural response to run away from adversity and to pursue wellness and growth.

In business, frequent drivers that push our organizations into motion are either:

  • The threat of competition that nowadays comes globally from everywhere, whether from large organizations or minor disruptor startups;
  • An attempt to eradicate organizational waste in all its forms. Lean Thinking proposes a relevant approach that helps identify and categorize, and constitutes a first step towards devising a solution. That is the downtime acronym, which stands for: defects, overproduction, waiting, non-utilized talent, transportation, inventory, motion and extra-processing; and
  • A contingency attempt to avoid product and service obsolescence, i.e.: technological or simply the obsolescence derived from the constantly changing customer demands.

Understanding this phenomenon, which seems quite linear when described, is central to understand that the worst scenario for a company -and consequently for its people- is to stay still, numbed and rested in its old merits. That of course if its aim is to remain in business, or better, drive steady growth.

Once people accepts that the need for motion is imperative and constant, we would expect to face reduced levels of resistance to change. Moreover, it would be easier to identify the non-supporters, either people or departments that create obstacles, or passively never question or take action to improve the status-quo.

Organizational myopia, to realize your company is already a victim of disruption, is as harmful as being aware and failing to take proper corrective action.

The faces of change

Across the years, I have had the chance to engage in diverse initiatives dealing with change or transformation. The subject of evolution is frequently not a standalone topic, but a combination of several topics and themes. Business processes re-engineering, organizational rationalization, systems development and integration, package implementation, business data enhancement, compliance to regulation, or for several years, highly specialized consultancy around the adaptation of industry best practice process improvement frameworks suitable for mid to large IT departments.

All of these initiatives had in common the need to embrace a new to-be model, and the need to secure the right conditions and governance to influence people’s adherence.

Change efforts are constant, and often come packed or hidden under other labels or themes.

Chances are that you too, in this very moment are already part of one or many initiatives, leading, or playing some other role. In the best case, you are aware of the context and your contribution to the overall effort.

Transformation capability

Running a Transformation is actually an effort in which multiple business disciplines converge. The most frequent are: business strategy, organizational change management (OCM), project portfolio management (PPM) and innovation management. Not to mention some more technical disciplines, which also are present depending the context, but that are now irrelevant to back the point I intend to establish here.

Being effective at transforming the organization requires the same effectiveness at each of the single business and technical disciplines it comprises.

The above somehow explains why reality shows that a company’s capacity towards running a Transformation can range a lot.

For instance, let us look to any company’s ability to roll-out a Transformation, i.e.: the strategy is already in place, and now, it is aiming to spread the new practices across the organization whilst ensuring adherence. Any roll-out involves putting into practice strong PPM practices. However, not all companies have equally matured processes and/or the required capabilities in place.

Actually, in terms of processes maturity and if you have been around for a while in the corporate world, I am sure you have also seen the following scenarios:

  1. no defined –no repeatable- processes/practices in place;
  2. defined processes in place but executed differently –generally due to the interpretation or convenience of the practitioners involved-;
  3. defined processes and controlled, but not optimized; etc…

Again, the particular maturity of each of the Transformation disciplines involved, will without doubt, contribute to determine a company’s overall Transformation capability, and attached to that its chances of success.

New rules of competition

In today’s hyper-competitive landscape, Michael Porter’s principle of sustainable competitive advantage is becoming a utopia, if not virtually expired. Let me first clarify that the word that has seemingly lost significance for being a rare thing, is the word sustainable.

Reality shows that any competitive advantage is nowadays short lived. Products and services generate high returns for limited time, especially when those relate to technological innovations.

Note that there is nothing wrong in defending a company’s competitive advantage while possible; however, being in complete denial to see how digital the world has become, it is a recipe for failure.

What worked well years ago as your most precious differentiator is most likely to be obsolete already or it will be soon. Competitive advantages are short lived.

How to stay relevant?

Every opportunity going to market might represent a new and profitable source of income for the company. By creating dedicated systems that, secure a constant flow of new business opportunities, companies are better empowered to encompass the volatile context they live in.

In the digital economy opportunities exist and are more likely to prosper when,: a) the company has in place innovation processes that create, protect and provide the conditions for new embryonic innovations to develop; and, b) the organization has acquired a new mindset of constant and non-fear motion, along a comprehensive set of skills of how to navigate transformation.

A culture that encourages innovation, and secures conditions for successful transformation, is a requisite to thrive in the digital economy.

The way forward

If the above makes sense to you, then please reflect and act upon the following:

  • How does your organization positions in regards to innovation and transformation practices?
  • What are some business leaders, in your and the other industries, already doing towards bringing in innovation and transformation continuity to their organizations?
  • What needs to change in your organization’s structure, processes, technology and culture to instill a continuous approach to transformation?

 

Please leave your thoughts in the comments.

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IT and Business professional driven by challenges that involve embracing change, achieving results and the ability to influence future direction. All views in this site are my own.

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